EXCHIGH SIGNALFINANCIAL10-K

Exelon recorded substantially lower net income despite higher operating income, while significantly increasing capital expenditures and debt levels.

The dramatic decline in net income alongside improved operating performance suggests meaningful one-time charges or increased financing costs that merit investor scrutiny. The substantial increase in capital expenditures to $8.5B indicates major infrastructure investment, which is being funded through higher debt levels that rose to $49.4B.

Comparing 2026-02-12 vs 2025-02-12View on EDGAR →
FINANCIAL ANALYSIS

Exelon's financial profile shows mixed signals with operating income growing to $5.1B but net income declining substantially to $1.2B, indicating significant non-operating headwinds. The company maintained strong operational cash flow generation at $6.3B while dramatically increasing capital investments and debt capacity. Cash reserves strengthened notably to $626M, suggesting solid liquidity management despite the earnings compression.

FINANCIAL STATEMENT CHANGES
Cash & Equivalents
Balance Sheet
+75.4%
$357.0M→$626.0M

Cash position surged 75.4% — strong cash generation or capital raise providing significant financial cushion.

Net Income
P&L
-53.1%
$2.5B→$1.2B

Net income declined 53.1% — review whether driven by operations, interest costs, or non-recurring items.

Accounts Receivable
Balance Sheet
+20.4%
$2.7B→$3.3B

Receivables grew 20.4% — monitor days sales outstanding for collection efficiency.

Capital Expenditure
Cash Flow
+20.2%
$7.1B→$8.5B

Capex increased 20.2% — ongoing investment in capacity or infrastructure for future growth.

Operating Income
P&L
+19.2%
$4.3B→$5.1B

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

Current Assets
Balance Sheet
+13.9%
$8.4B→$9.5B

Current assets grew 13.9% — improving short-term liquidity or inventory/receivables build.

Operating Cash Flow
Cash Flow
+12.3%
$5.6B→$6.3B

Operating cash flow grew 12.3% — strong conversion of earnings to cash, healthy business fundamentals.

Total Debt
Balance Sheet
+10.7%
$44.7B→$49.4B

Debt rose 10.7% — additional borrowing for investment or operations; monitor coverage ratios.

LANGUAGE CHANGES
NEW — 2026-02-12
PRIOR — 2025-02-12
ADDED
BGE determined that the carrying value was not recoverable and that its fair value was less than carrying value.
As a result, in 2022, a pre-tax impairment charge of $48 million was recorded in Operating and maintenance expense in Exelon s and BGE s Consolidated Statements of Operations and Comprehensive Income.
The fair value used in the analysis was based on an estimate of an expected sales price.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and (b) PART II, ITEM 8.
The City also has an option to terminate and purchase the ComEd system (municipalize), which also requires one year notice.
Beginning in 2024 through 2027, ComEd's electric distribution costs are recovered in accordance with a multi-year rate plan approved by the ICC and through annual reconciliation proceedings litigated before the ICC.
In October 2025, Pepco Maryland filed a fully forecasted test year rate case while it awaits the conclusion of the lessons learned process.
In 2024, BGE, Pepco, and DPL began deferring less energy efficiency and demand response program costs to a regulatory asset as a result of the EmPOWER Maryland Cost Recovery program Beginning January 1, 2026, program costs are no longer being deferred.
The Utility Registrants invest in rate base that supports service to our customers and the community, including investments that sustain and improve affordability, reliability, resiliency, security and safety to enhance the service experience of our customers.
Management continually evaluates growth opportunities aligned with Exelon s businesses, assets, and markets, leveraging Exelon s expertise in those areas and offering sustainable returns.
REMOVED
Management s Discussion and Analysis of Financial Condition and Results of Operations and (b) Part II, ITEM 8.
The separation was completed on February 1, 2022, creating two publicly traded companies, Exelon and Constellation.
See Note 2 Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information.
Business Services Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, finance, information technology, and supply management services.
The City also has an option to terminate and purchase the ComEd system ( municipalize ), which also requires one year notice.
ComEd is in the process of pursuing a new agreement with the City.
Beginning in 2024 through 2027, ComEd's electric distribution costs are recovered through a multi-year rate plan with case proceedings as filed with the ICC.
In 2024, BGE, Pepco, and DPL began deferring less energy efficiency and demand response program costs to a regulatory asset.
The Utility Registrants invest in rate base that supports service to our customers and the community, including investments that sustain and improve reliability and resiliency and that enhance the service experience of our customers.
Exelon seeks to leverage its scale and expertise across the utilities platform through enhanced standardization and sharing of resources and best practices to achieve improved operational and financial results.
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